Benson: Why Ellah Lakes’ N12.50 Price is Anchored in Tangible Assets and Scalable Earnings

Chief Financial Officer, Ellah Lakes, a diversified agro-industrial giant in the nation’s Agricultural sector, Hewett Benson, in this interview said the company’s N235 Billion public offer is a catalyst for structurally stable financial footing and industrial scale. Raheem Akingbolu brings the excerpts.

Ellah Lakes is a diversified agro-industrial giant that launched a ₦235 billion Offer for Subscription. Can you briefly outline the core value proposition of the company and why this specific moment is the right time for this massive capital raise?

Ellah Lakes represents a rare convergence of land scale, integrated value chains, and a clear pipeline of industrial expansion. Over the past few years, the Company has built one of the most significant land banks, while simultaneously laying the foundations for multi-crop and multi-product operations. Today, we are not simply a primary agriculture company, we are transitioning into a full agro-industrial platform with the ability to cultivate, process, refine, and distribute products across the palm oil, cassava, and livestock value chains.

*)This ₦235 billion raise comes at a strategic inflection point. The Company has already secured the assets, developed the land, and designed the processing blueprint. What is needed now is catalytic capital to unlock industrial-scale productivity. Nigeria’s growing food and manufacturing demand, coupled with structural shortages in refined agricultural inputs, means the market opportunity has never been stronger.

The timing is intentional: the groundwork is done, the market is primed, and the Company is prepared to convert its asset base into sustained, industrial-scale earnings.

The ₦12.50 per share price is the foundation of this Offer. From a financial stability and valuation standpoint, what specific components of the Company’s operations and financials were prioritised in determining this issue price?

The ₦12.50 price is anchored on a valuation approach that prioritised tangible assets, near-term earnings capacity, and the scalability of the Company’s operating model. First, the valuation takes cognisance of the Company’s extensive land bank (more than 30,000 hectares across multiple states) which provides an appreciating foundation to sustainable shareholder value creation. Most of the land is under development or close to yield-bearing stages, increasing the embedded value they carry.

Secondly, the valuation reflects the high-margin outputs expected from our processing expansion. Once operational, the palm oil mills, cassava processing plants, and livestock systems will generate refined products with substantially higher margins than raw agricultural outputs. The pricing therefore captures both the current net asset value of the Company and the near-term transformation of that asset base into industrial revenue.

Additionally, the issue price accounts for the Company’s significantly de-risked operational model. With diversified crops, multi-location assets, and a strategy built on integration rather than dependence on a single commodity, Ellah Lakes enters this raise with a structurally stable financial footing.

The facility upgrades and acquisitions are designed for a ‘step-change’ in operations. How will this investment allow Ellah Lakes to achieve best-in-class operational efficiency, and what magnitude of increase are you targeting in key metrics once the N235 billion is fully productive?

The investment introduces a structural shift in how Ellah Lakes operates. We are moving from a model that relies heavily on manual processes and fragmented supply chains into one governed by industrial automation, continuous processing, and seamless integration across all value chains. With upgraded facilities, extraction rates increase, processing downtime reduces, and throughput becomes significantly more efficient.

The modern palm oil mills allow for higher oil extraction from each ton of fresh fruit bunches. Cassava processing plants with improved drying, milling, and starch conversion technology significantly increase yield and product consistency. Livestock facilities benefit from better feeding systems, improved genetics, and climate-controlled environments that enhance growth cycles.

By the time the ₦235 billion is fully deployed, we expect a meaningful uplift in overall production efficiency, a sharp increase in processed output, and a reduction in per-unit operating cost. We are targeting, conservatively, a double-digit expansion in extraction yields, a tripling of processing capacity in certain chains, and a material improvement in gross margins as value-added products become the dominant revenue driver.

Can you share the financial deployment schedule for the N235 billion over the next 12 to 18 months? What key financial milestones are you tracking to ensure this large sum is channeled efficiently into the planned acquisitions and upgrades?

The deployment schedule is structured to deliver impact quickly while setting the stage for long-term productivity. In the first six months, significant capital will be allocated toward the acquisition of Agro-Allied Resources & Processing Nigeria Limited (ARPN).

In the subsequent period, focus will shift to upgrading and expanding processing infrastructure such as mills, plants, storage systems, logistics assets, and quality assurance facilities. This phase is essential for converting increased production into high-value output.

Other investments and working capital financing will be allocated as needed to support the growth strategy.

Throughout these stages, we are tracking milestones such as timely acquisition integration, facility commissioning timelines, yield improvements, increases in planting density, and incremental boosts in monthly production throughout.

In particular, when can investors anticipate that the new processing assets and integrated acquisitions will transition into their full operational productivity phase?

Several of the assets being acquired or upgraded are designed for near-term productivity. Many of the processing facilities are already at advanced stages of development, meaning investors can expect gradual revenue contribution to begin within the first operational year after deployment. Full industrial productivity is anticipated once commissioning and optimisation phases have been completed typically within 12 to 18 months.

Acquisitions with near-ready plantations will contribute more quickly, especially as harvested products can immediately feed into upgraded mills and plants. In essence, the timeline is short because the Company is not building its ecosystem from scratch; it is scaling an existing infrastructure and integrating acquisitions that complement the existing value chain.

Strategic acquisitions are a core focus of this raise. How will you ensure that these newly acquired assets are immediately accretive to the company’s revenue base and materially enhance the overall value?

We approach acquisitions with a clear operational philosophy: the assets must immediately slot into our integrated chain and start enhancing production or processing volumes. The select acquisitions we are pursuing have been evaluated not just for their size, but for their maturity, location, yield potential, and proximity to our processing hubs.

To ensure accretion, we prioritise assets that: reduce our dependence on third-party suppliers, contribute directly to processing plant utilisation, enhance economies of scale and expand our product pipeline without significantly increasing overhead

Much of the value will come from synergies such as shared logistics, shared processing facilities, integrated supply chains, and the ability to consolidate operational costs. These effects create immediate uplift in revenue and, over time, generate exponential value as the assets reach peak productivity.

The application list closes on December 5th. What is your primary message to the investment community about the benefit of participating in the Ellah Lakes growth story today?

Ellah Lakes Plc presents a compelling investment opportunity at a pivotal moment in its evolution to invest in a company at the threshold of a major industrial expansion. Ellah Lakes is not conceptual; it is real, asset-backed, and strategically positioned in a sector that Nigeria urgently needs to strengthen.

The capital being raised will be deployed into assets, investments and working capital financing to increase productivity, expand capacity, and deepen the Company’s integration. Investors who participate today are positioning themselves at the foundational moment of an agro-industrial platform that has the land, the scale, the market demand, and the strategic clarity to become one of Nigeria’s leading producers of essential agricultural products.